5 Yield Farming Platforms To Make Money Right Now!

Yield farming is a decentralized finance (DeFi) product offered by developers through crypto projects. Yield farming brought a new dimension to cryptocurrency investment and created a way for investors to earn without taking huge risks. But yield farming does not benefit investors only; it is a product that helps both ways.

What is Yield Farming?

Yield farming, in simple terms, means putting your assets to work for you. Instead of making money, you deploy your assets to earn you more. In Yield farming, investors place their assets in a secure DeFi protocol that pools them to generate profits through several DeFi activities, typically lending, staking, and providing liquidity.

Investors “sow” assets that are then used to facilitate financial services to other crypto inventors and projects on the condition of paying back with interests. The interests are drawn from interests in crypto lending, rewards from proof-of-stake mining, and rewards from providing liquidity pools for coins.

An example. Suppose you had $1,000 worth of ETH, and you invested in a yield farm with it. You can send the $1,000 to a DeFi pool dedicated to lending, liquidity, or staking. Rewards are calculated as annual percentage yield (APY) and paid through the smart contract. Most platforms set a locking period during which investors cannot withdraw their funds. But they permit early withdrawals with some penalties.

What are the Hottest DeFi Yield Farming Platforms?

Ethereum network is the first blockchain to receive DeFi yield farming platforms. However, through the Ethereum Virtual Machine (EVM), other blockchains can interact with protocols and smart contracts built on the Ethereum network. That simple feature opens a vast and unending window for developers and investors to enjoy the benefits of yield farming.

These are the five hottest yield farming platforms to make money from right now.

Uniswap (UNI)

Uniswap is the oldest and most-valuable yield farming platform in DeFi. Uniswap is built on Ethereum and has a $4.21 billion total locked value (TVL). Uniswap returns up to 7% APY depending on the project and other market conditions. Uniswap is quite popular among investors as its daily trading volume is above $3 billion across its platforms. Ether, USDC, and WBTC are currently high-performing assets on Uniswap with a combined TVL of $5.178 billion.

PancakeSwap (CAKE)

PancakeSwap is the most significant yield farm built on the Binance Smart Chain. PancakeSwap has a TVL of $ 5.526 billion. The daily trading volume is above $400 million and growing. Investors can contribute to the PancakeSwap liquidity pool by depositing cryptocurrencies to earn mining rewards and fees. Investors may stake their mining rewards to make CAKE, PancakeSwap’s native token, used for governance. CAKE currently trades at $12.92.

The best-performing farms are on PancakeSwap. The combined APY for the major pools reaches over 300%.

Compound (COMP)

Compound is a DeFi protocol that permits users to provide liquidity and earn rewards in cTokens. Liquidity providers are also rewarded COMP for using Compound. COMP is the governance token of the Compound ecosystem and currently trades at $194.97. With a TVL of $10.5 billion, Compound is one of the biggest yield farming platforms in DeFi.

Aave Finance (AAVE)

Aave is one of the fastest-growing yield farming platforms with a TVL of $13.98 billion. The pool is one of the biggest in DeFi, and liquidity providers can earn up to 6% APY. Aave is an open-source liquidity provider where investors can pool funds to provide project liquidity. Its native token, AAVE, is shared as a reward that liquidity providers can use to lower transaction fees and govern the protocol.

Venus

Venus is a DeFi borrowing platform where investors can deposit assets to provide a pool from which other users can borrow. The liquidity providers earn interest that they can exchange for Venus stablecoin or borrow more assets.

Although there are dozens of yield farms, it is essential to research each one before committing funds. The risk of losing funds is not as high as in spot trading, but liquidity providers can lose their funds to malicious developers who steal the liquidity pool. Yield farming is one of the best ways to earn passive revenue in cryptocurrency.

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